An ODD beauty is turning heads on Wall Street. ODDITY Tech, Ltd. (ODD proposed), the Israeli company that owns the IL MAKIAGE makeup brand, is the $300 million deal atop this week’s IPO Calendar. Women love its makeup, according to the online reviews. But the Street loves ODDITY Tech’s bottom line even more: Net income equaled nearly 10 percent of its revenue for the last 12 months. (Editor’s Note: This column, published Sunday afternoon, July 16, 2023, was updated Monday after ODDITY Tech raised the price range of its IPO.)
Goldman Sachs, Morgan Stanley and Allen & Company LLC are leading the joint book-runners’ team, which includes BofA Securities, Barclays, Truist Securities, JMP Securities and KeyBanc Capital Markets.
UPDATE: ODDITY TECH increased the price range of its IPO early Monday (July 17, 2023) to $32.00 to $34.00 – up from $27.00 to $30.00 – and kept the number of shares at 10.53 million shares – to raise $347.49 million, up from the initial estimate of $300.0 million, according to an F-1/A filing. If the IPO is priced at the new range’s mid-point of $33.00, ODDITY Tech will have a market cap of $1.87 billion. (The market cap under the IPO’s original terms was $1.61 billion.)
The company, however, stands to receive only $57.89 million in IPO proceeds, based on the new range and its $33.00 mid-point. That’s because ODDITY Tech is offering only 1.75 million shares of the 10.53 million shares in the IPO. Selling stockholders are offering the remaining 8.77 million shares. The company will not receive any proceeds from the sale of the selling stockholders’ shares.
The rest of this week’s IPO lineup consists of a trio of micro-cap deals with combined IPO proceeds of about $35.1 million. For details, please take a look at the IPO Calendar.
Family Biz Meets James Bond
The story of ODDITY Tech combines the basics of a family business with a dash of James Bond – if Bond had served in Israel’s military. CEO Oran Holtzman and Shiran Holtzman-Erel, the chief product officer, co-founded ODDITY Tech in 2013. They are brother and sister. Niv Price, ODDITY Tech’s CTO (chief technology officer) since July 2021, served in the Intelligence Directorate of the Israeli Defense Forces from October 1995 to December 2016.
“Our success is based on our outsider approach,” Oran Holtzman wrote in the founder’s letter, which is part of the prospectus.
ODDITY Tech, Ltd., based in Tel Aviv-Jaffa, describes itself as an outsider intent on disrupting the global beauty industry with its tech platform along with its use of AI and data. The global beauty and wellness market , including beauty, personal care and dietary supplements, is estimated at over $600 billion, according to Euromonitor, as the prospectus notes.
ODDITY Tech’s first brand, IL MAKIAGE, was launched in 2018. IL MAKIAGE was the fastest-growing global beauty direct-to-consumer (D2C) platform from 2020 through 2022, according to Women’s Wear Daily, the prospectus says. IL MAKIAGE, whose products range from eyeshadow and eyeliner to moisturizer, concealer, foundation and lip color, was the fastest-growing D2C beauty brand in the United States through 2021, which is the latest available data from Digital Commerce 360, according to the prospectus.
IL MAKIAGE uses AI-driven algorithms to help women find foundation that’s the right match for their skin tone. It also uses data to develop products and to make product recommendations to customers using its tech platform, the prospectus says.
ODDITY Tech’s second brand, Spoiled Child, was launched in 2022 with the goal of disrupting the global wellness industry. Spoiled Child specializes in anti-aging collagen products for hair and skin.
As of March 31, 2023, ODDITY Tech had over 4 million active customers, defined as customers who made at least one purchase within the last 12 months, the prospectus says.
In April, ODDITY Tech bought Revela, a biotech focused on using artificial intelligence-based molecule discovery to develop beauty and wellness products, the prospectus says.
For IPO investors, the most important color in ODDITY Tech’s portfolio is the black on its balance sheet. The company earned net income of $38.3 million on revenue of $399.8 million for the 12 months that ended March 31, 2023, according to financial statements in the prospectus.
(For more information about these companies, please check the IPO Calendar and the individual IPO Profiles found on IPOScoop.com’s website.)
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